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IRS Offers Voluntary Certification of Return Preparers

Following the defeat in federal
court of its mandatory tax return preparer regulation
program, the IRS in late June introduced a voluntary
program of tax return preparer certification.

Under Rev. Proc. 2014-42, tax return
preparers who wish to participate in the program
would:

Hold a valid preparer tax
identification number (PTIN);

Complete 18 hours of continuing
education from an IRS-approved provider;

Have limited rights to represent
taxpayers before the IRS concerning returns they
prepared;

Be included in a database of
return preparers who were in the program;

Consent to abide by the duties and
responsibilities under subpart B of Circular 230, Regulations
Governing Practice Before the Internal Revenue Service (31 C.F.R. Part 10);

Receive an IRS-issued Record of Completion, documenting their participation in the program.

The 18 hours of continuing education
that program participants must complete will include a
six-hour refresher course for tax season, 10 hours of
federal tax law topics, and two hours of ethics. The
program will be in place for the 2015 filing season, but
it will have a phased-in requirement of 11 hours of
continuing education that must be completed in 2014.

Return preparers who passed the
IRS's previous return preparer registration program
examination or who are licensed by or registered with a
state or other recognized entity after passing an
examination that covers federal tax will be exempt from
taking the six-hour tax season refresher course. The IRS
will post a list of states and entities that offer
examinations that qualify for purposes of this exception.

Preparers who elect to participate
will be listed in a directory on the IRS website beginning
in January 2015. The database will also include
practitioners with recognized credentials and higher
qualifications, such as enrolled agents, attorneys, CPAs,
enrolled retirement plan agents, and enrolled actuaries.
The directory will not include tax preparers with preparer
tax identification numbers who are not members of any of
the above-listed groups of preparers.

Only tax return preparers who have a record of participating in the
program for that tax year will be able to represent their
clients before the IRS during an examination of a return
that they signed or prepared. (CPAs, attorneys, and
enrolled agents continue to have unlimited representation
rights.)

Tax return preparers who register
for the program and receive a Record of Completion will
not be allowed to use the terms "certified,"
"enrolled," or "licensed" to describe
their status, nor may they make representations that they
are endorsed by the IRS. They may represent that they hold
a valid Annual Filing Season Program Record of Completion
for that calendar year and that they have complied with
the IRS's requirements for receiving a Record of
Completion.

The winner of The Tax Adviser’s 2014 Best Article Award is James M. Greenwell, CPA, MST, a senior tax specialist–partnerships with Phillips 66 in Bartlesville, Okla., for his article, “Partnership Capital Account Revaluations: An In-Depth Look at Sec. 704(c) Allocations.”

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